The proposed studies are aimed at understanding how a single morphogen initiates the complex hierarchy of events leading to axis specification during animal development. The morphogen under investigation, Dorsal, is a transcription factor that is distributed in a dorsal/ventral nuclear concentration gradient in the Drosophila blastoderm embryo. This factor functions as both an activator and a repressor of transcription to establish multiple domains of gene activity along the dorsal/ventral axis of the embryo. The ability of Dorsal to function in diverse ways is dependent upon direct and indirect interactions between the Dorsal rel homology domain (RHD) and a large array of interacting proteins. One Dorsalinteracting protein that plays a key role in regulating dorsal/ventral pattern formation is the corepressor Groucho. This factor, which functions as a homotetramer, may mediate an interaction between Dorsal and histone deacetylase Rpd3. The specific aims are to: 1) Identify mutations in the RHD that interfere with specific Dorsal activities and utilize these mutations to make direct links between the biochemical and developmental functions of Dorsal; 2) Determine the structural basis and developmental role of Groucho tetramerization through a combination of in vitro mutagenesis, biophysical analysis, and reverse genetic assays; 3) Determine the role of Rpd3 in Grouchomediated repression through the phenotypic analysis of new rpd3 alleles, and through a structure/function analysis of Rpd3 aimed at characterizing its Grouchointeraction domain; 4) Characterize new Dorsal and Grouchointeracting proteins and determine, via genetic analysis, if the encoding genes have important roles in the developmental processes governed by Dorsal or Gro. The pathway regulating dorsal/ventral patterning in Drosophila is homologous to pathways regulating the vertebrate immune response and vertebrate pattern formation. Thus, these studies may lead to a better understanding of human immunological and developmental disorders.